What is your economic outlook, and how has that informed your view of credit spreads?
The economy is actually doing well. in fact, I expect this year to be even better than last year. We believe GDP growth may be around 3% this year. There are a few reasons for that: less impact from tariffs, the boost from tax bill, continued AI spending, deregulation, and so on. So, I am quite positive about the economy. But credit spreads are pretty tight already. So, the upside potential is limited in many sectors.
What is your economic outlook, and how has that informed your view of credit spreads?
We always try to look for attractive opportunities. Right now, we think some out-of-index sectors offer higher spreads and good diversification benefits, which can help improve our risk/return profile. One sector we really like is trade finance. It is less correlated with other sectors, and has higher spreads. Additionally, trade finance is more transaction-based, so it is less sensitive to the macro economy.
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